Why insurance agent do not market term insurance?



I am working in an IT company & agent comes to our company for marketing ULIPs. By reading various articals on ULIPs, I now understand the charges & I wonder how these agents hide the charge story partially or completely. Some of my teammates blindly sign on the policy parers & get trapped in the ULIP trap.

I asked all agents for Term Insurance & most of them clearly refuse that they only sell ULIPs.I want to know that why Agents & insurance companies have a single point agenda of selling ULIPs & not market term insurance.

Why insurance agent do not market term insurance?
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11 Replies to “Why insurance agent do not market term insurance?”

  1. It’s simple. Term insurance is the cheapest insurance because it is just insurance with nothing added. So there is very little commission in selling term insurance. Other insurance policies include savings account features, and most of the premium you pay the first 2-3 years goes to the agent as commission. You get a lot less insurance for the money.

    If you need a certain amount of life insurance, it is always best to buy term insurance. Insurance companies are great in explaining benefits of other policies, but they never tell you the negative aspects. It is easy to show with simple numbers that insurance other than term is a good deal for insurance companies but not for the insured person.



  2. The answer to that is very simple, and it is spelled $ $ $ $ $ $ $ $ .

    Commissions on term policies are but a small fraction of what an agent will earn by selling a ULIP or similar. If you’re not comfortable with a ULIP (and you have reason to NOT be comfortable), then simply head out on your own seeking term life insurance which suits your needs. It’s relatively inexpensive and will give you great peace of mind, should you leave behind a family in the event of your untimely death.


  3. Hi, It is Nikhilesh from Jaipur. I am sales manager cum trainer in LIC corporate. Your question is too good to answer. Every agent want to earn more through policy selling. They get good commission if premium and policy term is high. But There are very low premium in term insurance policies, so they don’t earn enough to serve you for 15-20 years. But it is not only beneficial for them but for you also. Bcoz in term insurance there are nothing on maturity, means you will not get anything on maturity, and this type of insurance is suitable for touring job persons only. And I think ULIPs are best investment option today. Bcoz it give us both growth of money and insurance. Hence……. if u r not satisfied, u can write me again…


  4. These sales guys gives so many different reasons for not selling term insurance. They will tell you that you do not get anything on maturity (like above LIC agent Answerer). My answer to all about it is that there is mortality charge in each & every insurance policy that is deducted from your premium before investment & this charge gives you the insurance benifit. This mortality charge increse with age & so policies like ULIP charge it at increasing rate. Now in term insurance , you are charged an average of this mortality charge every year.

    So You do not get mortality charge back in case of ULIP & so no return on maturity of term insurance. One will have to pay to get insure & mortality charge & term insurance premium amount is for this purpose only.

    My problem with ULIP do not end here. They have a high & complex cost structure, in which they charge high initial premium. This charge goes in agent commission & sales expenditure. But the investor is badly effected due to this charge. Now as I see that there is a good product available that is not that much front loaded & i.e. Mutual fund. So I always advice all to go for Term Insurance + MF.

    My answer to you question is that agents get high percentage of commission on ULIP , which has high average premium due to investment portion & so total commission is high. Also people are more willing to invest in market link product & dont understand the importance of term insurance. Also people do not read the fine print of document & do not read & understand the impact of charges before taking ULIPs.


  5. It is only because of commision.

    In term insurance , commision will be low (as total premium is low) & will be spread in the term of policy. In case of ULIP, amount is high & so commision is high & much of it will be on the first year premium. So even if you close the policy, agent will get commission.


  6. The agents make little to no commission on term policies. Their commission is based on the amount of premium dollar they sell, so naturally they’re going to sell the products with higher premiums(i.e-UL, whole life, variable life). Most, not all, agents look out for themselves before they look out for you.


  7. Term or cash value? When will people stop bashing insurance agents? They are making a living like everyone else and some honestly believe cash value insurance is best and are not only looking for more commission. But they are no different than any other salesperson. How many real estate agents are only selling houses that cost $ 100,000 or less? That would be good, wouldn’t it? Insurance, taxes, upkeep, etc. are less and then you would have more to invest somewhere else.
    That is the reason there are more than one kind of insurance, people have different needs and reasons for buying life insurance. Buy what you need and what you are comfortable with and with a company and/or agent you trust. Cause when you die, your beneficiary will appreciate help from a knowledgeable agent. I have helped many people with death claims. It can be and is a hard, trying experience


  8. The agent should always do what is right for the client 1st!!!

    the cash will come when the client converts to a cash value policy.

    remember that life insurance should be a life commitment not a Temporary fix.


  9. These agents are what’s known as a “one trick pony”, similar to people that strictly offer term and no other form of insurance. Different insurance products have their purposes for different reasons and a good agent will be able to critically analyze your situation and recommend what is right for you with possibly a mix of the products, instead of taking their strategy and trying to squeeze your situation so it fits.

    Aside from the commission aspect pointed out in other answers, some agents view term insurance as garbage insurance. It’s like renting insruance…there’s no cash value so if you cancel you get nothing, eventually it will expire (right around the time you are most likely to need insurance…around age 80), and it gets horrendeously expensive when you get older. Basically, you get what you pay for…less options and flexibility. U/L policies are very flexible, so the agent/company


  10. Dear Sabina
    What you say is okay, ULIPs contain more allocation charges. What you read about them are right. I too guided to so many people who approached me by email about LIC’s Money Plus which was sold hot with false promises.
    When you know about this, why didn’t you advise your friend, who signs blindly.
    A few agents are there to missell for their own profit. but it is your right to know every thing about the product before sign.
    For your information, I never sold any ULIP on false informations and I sold Term policies after explaining them that on survival they recieve nothing and this is like vehicle insurance and health insurance. If any thing happens with in the term your nominee will get the Sum Assured and you will get nothing.
    Some people do not want to have term policies for this reason and some other want ULIPs because it gives both insurance coverage and high returns on maturity.
    I suggest LIC’s JEEVAN AMRIT a limited payment term policy with return of premiums. For more details on this plan visit my website.

    good luck
    [email protected]
    http://www.geocities.com/pnkmurthy/lic.html





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